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E23-7 Compute materials and labor variances Nona Inc. which produces a single product, has prepared the following standard cost sheet for one unit of the
| E23-7 Compute materials and labor variances | |||||||||||||||
| Nona Inc. which produces a single product, has prepared the following standard cost sheet | |||||||||||||||
| for one unit of the product. | |||||||||||||||
| Direct materials (8 pounds at $2.50 per pound) | $20 | ||||||||||||||
| Direct labor (3 hours at $12 per hour) | $36 | ||||||||||||||
| During the month of April, the company manufactures 235 units and incurs the following | |||||||||||||||
| actual costs. | |||||||||||||||
| Direct materials purchased and used (1,900 pounds) | $5,035 | ||||||||||||||
| Direct labor (700 hours) | $8,260 | ||||||||||||||
| Instructions | |||||||||||||||
| Compute the total, price, and quantity variances for labor and materials. | |||||||||||||||
| NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . | |||||||||||||||
| (a) | Total Materials Variance: | ||||||||||||||
| ( | AQ | X | AP | ) | minus | ( | SQ | X | SP) | ) | |||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | |||||
| = | ? | minus | ? | = | Value | ||||||||||
| Materials price variance: | |||||||||||||||
| ( | AQ | X | AP | ) | minus | ( | AQ | X | SP | ) | |||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | |||||
| = | ? | minus | ? | = | Value | ||||||||||
| Materials quantity variance: | |||||||||||||||
| ( | AQ | X | SP | ) | minus | ( | SQ | X | SP | ) | |||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | |||||
| = | ? | minus | ? | = | Value | ||||||||||
| (b) | Total Labor Variance: | ||||||||||||||
| ( | AH | X | AR | ) | minus | ( | SH | X | SR | ) | |||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | |||||
| = | ? | minus | ? | = | Value | ||||||||||
| Labor Price variance: | |||||||||||||||
| ( | AH | X | AR | ) | minus | ( | AH | X | SR | ) | |||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | |||||
| = | ? | minus | ? | = | Value | ||||||||||
| Labor quantity variance: | |||||||||||||||
| ( | AH | X | SR | ) | minus | ( | SH | X | SR | ) | |||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | |||||
| = | ? | minus | ? | = | Value | ||||||||||
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A Textbook Of Cost And Management Accounting
Authors: M N Arora
11th Edition
9390470501, 978-9390470501
